★ 20 Ways to Generate Stock Investment Profits with AI - 9. Exploiting Alternative Data Sources

 

9. Exploiting Alternative Data Sources

Introduction
Beyond filings and prices, alternative data—satellite imagery, credit-card transaction trends, web-scraped reviews—provides fresh market insights.

Data Examples & AI Processing

• Satellite Traffic: Use convolutional neural networks (CNNs) on parking-lot images to predict retail foot traffic.

• Credit-Card Spend: Apply time-series models to aggregated spend data for sector demand forecasts.

• Web Scrapes: Use transformers on e-commerce reviews to gauge product sentiment and pricing shifts.

Integration Workflow

1. Vendor Partnerships: Subscribe to Orbital Insight or Earnest Research feeds.

2. Preprocessing: Normalize raw inputs; anonymize to remove PII.

3. Modeling: Train CNNs for imagery, transformers for text; output predictive signals.

4. Ensemble: Blend alt-data scores with fundamental and technical factors in a stacking model.

Case Study
Satellite-derived parking occupancy correctly predicted a retailer’s same-store‐sales beat two quarters before official earnings, enabling early long exposure.

Conclusion
Incorporating alternative data with AI broadens your informational edge—spotting trends invisible to traditional investors.